Inaction on churn could trigger ASIC regulations: Brogden
The industry's failure to self-regulate on life/risk churn carries with it the risk of the regulator imposing regulations, according to Financial Services Council chief executive John Brogden.
Addressing a Money Management/Financial Services Council forum, Brogden said a failure by the industry would likely see the Australian Securities and Investments Commission step in.
He said that for this reason the industry needed to heed the warnings of the regulator.
Brogden's statement followed on from a warning from ASIC commissioner Peter Kell that a problem with churn still existed in the industry.
The FSC chief executive pointed to recent data on policy lapse rates as underscoring the problem.
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
